Detailed explanation of Solana chain Dogecoin BONK: Under the banner of reviving SOL, token distribution is questionable

PANews · 2023-01-05T03:30:01.000Z
Recently, Bonk, a meme project on the Solana chain, broke the market that had been quiet for nearly a month. There were a lot of discussions about BONK on social media. According to Solana chain transaction data aggregator birdeye, as of January 4, the Bonk project’s token BONK has increased by as much as 12,500% from its bottom to the current price since it was launched on the secondary market, with an increase of 171% in the past 24 hours. According to data from Dune Analytics on January 4, Bonk’s on-chain transaction volume has exceeded 1.8 million, and its fee income has reached 2,687,414,287 BONKs. Within a week, the number of addresses held on the chain has increased to 97,000, and it has been successively banned by centralized exchanges. Mexc, Huobi and bybit are online. This shows its high market attention.
Recently, a meme project on the Solana chain, Bonk, has disrupted the market that has been quiet for nearly a month, and discussions about BONK have been heard one after another on social media. According to data from birdeye, a transaction data aggregator for the Solana chain, as of January 4, the price of the token BONK of the Bonk project has increased by 12,500% from its bottom to the current price since its listing on the secondary market, and by 171% in the past 24 hours.
According to Dune Analytics data on January 4, Bonk's on-chain transaction volume has exceeded 1.8 million, and the fee income has reached 2,687,414,287 BONKs. The number of on-chain holding addresses has increased to 97,000 within a week. It has been listed on centralized exchanges Mexc, Huobi and bybit, which shows its high market attention.
In this article, PANews will explain BONK to you from the dimensions of narrative, economic model, on-chain data, community, etc.
As we all know, since the collapse of FTX and the scam of Alameda Research was exposed by the market, the Solana chain has been hit hard, and some leading projects have even announced their migration from the Solana chain to other chains such as Ethereum. For example, the Solana ecosystem NFT project DeGods announced on December 26 that it will be officially bridged to Ethereum in the first quarter of 2023.
At this time, the Bonk project was launched. Bonk satirized some projects on the Solana chain that succumbed to the "Alameda token economics". It hopes to build an interesting meme coin that will give everyone the opportunity to gain value through fair distribution. The community calls it "destroying Alameda and saving SOL."
Low demand, high market value
According to Bonk's official information, its goal is to launch OpenBonk to restore liquidity for decentralized exchanges on the Solana chain. BONK is the first Solana Dogecoin issued to the community. According to the blockchain browser Solscan data, its current supply is 99.18 trillion. According to Coinmarketcap data, its current circulation is 56 trillion.
50% of the total supply of BONK will be airdropped to the Solana community. The specific distribution details are: 20% will be airdropped to Solana NFT collectors, including 297,000 individual NFTs; 15% will be airdropped to early traders; 10% will be airdropped to artists and collectors in the Solana ecosystem; 5% will be airdropped to Solana developers. The remaining 50% will be distributed as follows: 5% for OpenBook team development, 5% for marketing, 5% for providing liquidity, 15% for BONK DAO, and 20% for early contributors.
Tokens for early contributors will vest linearly over a 3-year release cycle. The team portion is allocated to active contributors (social, artistic, and integration assistance) at a maximum of 1% per year, and the vesting time is based on a rolling month, where each monthly allocation has a 6-month cliff and vests linearly over 3 years. For example, if Contributor A works hard and receives tokens allocated in January 2023 (for simplicity), the contributor will receive the next token allocation in July 2023, which will be allocated in 3 years.
Bonk uses large-scale and wide-ranging airdrops to let more Solana community members know about the project. Moreover, community users who receive airdrops will spread the word, further expanding the popularity of the Bonk project. These marketing effects have also been reflected in the secondary market price of BONK tokens. According to the price of BONK at the time of writing (0.00000255U), its total market value is 252 million US dollars and its circulating market value is 142 million US dollars. According to Coingecko data, its total market value ranks 195th in the entire network.
Judging from its circulating market value and market value ranking, BONK's valuation is already high in the short term, and its profit margin has reached short-term expectations. At the same time, except for the 50% supply issued by airdrops, the remaining 50% can be understood as all owned by the team. In addition, except for the early contributors, the release cycle of this part of the tokens is 3 years, and the official Bonk has not clearly announced the release cycle of the rest.
Regarding the demand for BONK tokens, Bonk officials stated on social media on January 1, 2023 that the project has cooperated with Onsol Labs to launch the ".bonk" domain name service. Currently, it takes 69 million BONK tokens to create a ".bonk" domain name. The BONK tokens used to create the ".bonk" domain name will be completely destroyed. Bonk reminds the crypto community that some mainstream wallets currently do not support the ".bonk" domain name, but wallet integration has been started. The wallets currently supported include: Phantom, Solflare Wallet and Backpack.
However, there are already many projects related to domain name services on the SOL chain, and the current development is not optimistic. In addition, the consensus on domain names on the chain is basically monopolized by ENS. Therefore, whether the demand generated by domain names can really lead to a certain degree of destruction of BONK tokens remains to be tested by the market.
The holding addresses are concentrated and the distribution is questionable
According to the blockchain browser solscan data, the top 20 addresses holding BONK account for 49.44% of its supply, and the top 5 addresses account for as much as 34%. Moreover, 20 addresses accounting for 0.9625% of the total BONK tokens received BONK tokens 19 days ago. The distribution of its tokens is relatively concentrated, and the source of the tokens held by the 20 addresses with the same number of tokens is unknown, and it is impossible to identify them as the recipients of the airdrop. Because these addresses have only one on-chain transaction to receive BONK tokens, there is no other on-chain behavior, and the airdrop time of the Bonk team is later than 19 days ago.
Therefore, it can be ruled out that it is the address of the airdropped user. After the community users raised questions, the official reply was that it was 20 contract addresses that were linearly assigned within 3 years starting from January 2023. But this still cannot answer the community's questions clearly. First, it is not transparent to which team the 20 contract addresses belong; second, it is impossible to predict when they will be sold and at what proportion.
According to a tweet from Twitter user Badbrothers: The tokens distributed by the team before the airdrop time are for the Bonk team to sell to community users at any time. Moreover, the 20% of tokens announced by the early contributors to be released linearly for 3 years cannot be proved, and there is no contract showing the token lock time on the chain. The time lock is a very simple contract code, but the team did not specify it. Therefore, the team can actually sell this part of the tokens at any time.
The official website was hastily registered, and community cooperation was unclear
The goal of OpenBonk shown on Bonk’s official website is to bring back liquidity to the Solana chain, which may be one of the lowest team effort goals it has ever seen, and it is also a meaningless air token. At the same time, it is impossible to confirm whether the “partners and integrations” officially disclosed are true, and the corresponding partners have not issued a statement.
Bonk first became known in the English-speaking world through airdrops. Currently, many well-known projects are working with Bonk, such as Magic Eden, the NFT trading platform with the highest transaction volume on the Solana chain. On January 3, it tweeted to ask the community whether it should expand BONK tokens for its platform as the underlying token for NFT transactions. Aurory, a well-known game on the Solana chain, cooperated with Bonk and will airdrop 5 billion BONK tokens to its NFT holders. However, many other projects mentioned by Bonk officials on social media did not respond.
Bonk officially began posting content on social media Twitter on December 9. According to information on the GoDaddy website, the Bonk official website was registered on December 18, 2022. This shows how hasty its launch was.
 Summarize
Judging from the current increase and market value of BONK tokens, it is already in an overvalued stage. Moreover, its airdrop behavior is ongoing, and the short-term selling volume is relatively large. From the data on the BONK token chain, its token holding addresses are quite concentrated, and the distribution details are also questionable; more than 50% of the total tokens belong to the team, and the corresponding lock-up period is not locked in the contract, and can be sold to the community in full at any time. From a series of actions before the Bonk project went online, it can be seen that its launch was very hasty, there was no response from social media in the early stage, and the subsequent BONK token secondary market suddenly broke out, with very obvious signs of market makers.
In addition, the launch cycle of Bonk also coincides with the recent turning point of the Solana community. On December 30, Ethereum founder Vitalik Buterin tweeted: Some smart people told me that Solana is a serious and smart development community. Now those terrible opportunists have been washed away, and the Solana chain will have a bright future. But it is difficult for me to judge this from the outside, and I still hope that the community will have a fair chance to thrive. Since then, the price of Solana chain's token SOL has also risen. Since Vitalik's tweet, it has risen by 70%. As a result, some of the market's attention has been attracted to Solana.
At present, the current development of Bonk is that strong dealers complete the operation through marketing to make profits. In the long run, the Bonk project needs to gain stronger consensus, whether it is marketing or innovative gameplay, it needs further development. Otherwise, the current model will be difficult to support such a high valuation.
At the same time, the popularity of Bonk has attracted more community users to return to or use Solana chain products for the first time. For the Solana community, the emergence of Bonk has indeed played a role in saving Solana. If Bonk can have better follow-up development, the Solana community will be happy to see it.